Consider a Profit-Maximizing Monopolist Whose Consumers Have Identical Demand Curves

question 69

Multiple Choice

Consider a profit-maximizing monopolist whose consumers have identical demand curves.Which of the following will be true if the firm employs a two-part tariff pricing strategy for these consumers?

• A)The firm will produce less output compared to a firm that is not using this pricing strategy.
• B)The firm will capture the entire consumer surplus.
• C)The firm will charge a tariff that also maximizes revenues.
• D)The firm will charge consumers a different entry fee,but a constant per-unit price.

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Definitions:

Trailer Service Brakes

Trailer service brakes are the primary braking system on a trailer, designed to be activated by the driver to slow down or stop the trailer during transport.

Treadle Valve

A type of foot-operated valve used in pneumatic systems of vehicles, especially for controlling the air pressure to brakes.

Panic Application

A sudden and forceful application of the brakes by a driver, typically in an emergency to avoid a collision.

ATA

The acronym for American Trucking Associations, a large trade association for the trucking industry in the United States.